Hacking cases in the cryptocurrency industry are becoming more frequent costing the exchanges hundreds of millions this year alone. Etherscan became the latest hacking victim on Monday after an unknown person hacked its sites.
According to reports, the hacker was able to penetrate Etherscan’s system and leave pop-up text that stated:
“1337,” decades’ old hacker lingo for “you’ve been hacked”
Etherscan users were quickly informed about the hack on Twitter by fellow users. Later on the day, the Etherscan team posted an update on Reddit assuring their users that they were working on the matter and all their information was secure.
It turns out that all the hacker did to leave the pop-up text was write a comment on the site. The Etherscan team immediately disabled the comment section on the site upon the discovery. Etherscan assured its users that none of their funds was accessed and all their personal information was still intact.
Lack of a digital wallet on the Etherscan site might have saved the company from experiencing great losses from the hack. However, by the look of things, the hacker simply wanted to show Etherscan that they needed to upgrade security for their platform.
Since the hack, Ehterscan has made numerous changes and updates to prevent such an incident in the future. Though the hack caused great panic especially among the users, it had helped the company to create a more secure platform for its users.
Many crypto exchanges would be lucky if they were to be hacked and leave unscathed. Last week, South Korean exchange, Coinrail lost about 30% of its coin after its system was hacked. The company was able to recover part of the stolen coins. Authorities are still doing their investigations on the matter. In January, Coincheck lost more than $500 million worth of cryptocurrency.
According to Henri Arslanian, the head of financial technology in Asia at consultancy PwC, hackers will continue attacking the cryptocurrency industry as it provides huge rewards and some of the exchange makes it too easy for the hackers.
Hacking has become a disease that is slowly killing the cryptocurrency industry. This has made Investors become reluctant in making investments in the cryptocurrency industry. Some have had to leave the industry completely with only a few willing to risk their cash for the second time. Some experts argue that crypto exchanges still need to create a security firewall that cannot be penetrated.
Better security measures should be put in place to avoid such incidences from happening. According to the Benchmarking study, 91 % of large cryptocurrency exchanges use software to create a complete record of all internal records, which allows them to quickly discover potential inconsistencies. About 83% of the Small crypto exchanges were reported to use this system. The study also indicated that large cryptocurrency exchanges are keen in conducting regular security audits compared to small exchanges.
After every hack, cryptocurrency prices drop drastically. People flood exchanges looking to sell their coins to avoid falling victims of the hacks. This causes great instabilities on the coins in the market.